C4E-Ref- FCWPC - Parking - Strategic Pricing4 MIAMIBEACH
€ify of Miomi Beoch, lZ00 Convention Cenier Drive, Miqmi Beoch, Florido 33I39, www.miomibeochl .gov
COMMISSION MEMORANDUM
To: Mayor Philip Levine and Members of
FROM: Jimmy L. Morales, City Manager
DATE: May 21,,2Q14
SUB]ECT: REFERRAL TO THE FINANCE AN
PARKING - STRATEGIC PRICING
City Com
CITYWIDE PROJECTS COMMITTEE -
The Mayor and Commission have identified mobility, transportation, and traffic congestion as
priorities for improved resident quality of life. One initiative currently underway is to reduce
traffic congestion through the regulation of commercial loading activity and reduce the
obstruction of traffic on major thoroughfares. This is just one piece of the traffic congestion
puzzle.
Several major U.S. cities, including, San Francisco and Santa Monica, California; and
Seattle, Washington have implemented strategic parking pricing to achieve urban planning
goals. I have attached an article entitled "The Parking Price is Right" published in the May
2014 issue of Public Management. This article provides great insight of proven progressive
parking pricing strategies that have resulted in increase parking availability, reduced traffic
congestion, and although it may seem counterintuitive, increased economic growth for
businesses.
As you may recall, the Administration is pursuing the TIGER grant in orderto fund a number
of mobility and transportation initiatives. This initiative may very well be a game changer and
a key component is "smart parking". ln the simplest of terms, smart parking is the use of
state-of-the-art technology to monitor the use of parking spaces in real time in order to
manage parking "supply and demand" and apply strategic pricing to encourage use where
demand is low through pricing and achieve the benefits mentioned above.
The Administration is referring the issue of strategic pricing for parking to the Finance and
Citywide Projects Committee for their review and direction.
JLM/KGB/SF
T:\AGENDA\2014\May212014\StrategicParkingPricingFCWPCReferral.cme.doc
Agenda ltem CVE
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arking can be a powerful
resource for promoting
economic development and
improving the quality of life in
any community. And one of
the most important tools at the disposal
of city and county ad[unisuators and
TAHEAWAYS
) Learn how pricing on-street parking
can support economic development
and urban planning goals by freeing
up short-term spaces for customers.
) Learn how nol to price on-street
parking and reasons why.
14 pusr-rc TIANAGEMENT I mny zorq
planners is parking pricing. By imple-
menting strategic pricing, local govern-
melts can influence where drivers park
and for how long.
When done right, this can have an
extraordinary impact on a community's
economy and the health of local busi-
nesses. It can also affect the quality of
life for residents. The problem is, most
communities don't do it right.
The good news is iiat some places are
stafting to reco8nize the power of pricing
and are begiruLing to leverage parking
pricing as art impoftant tool for supponing
local businesses, reducing traffic conges-
Iion, cutting vehtcle-borne polluton, arid
generally improving the quality of life for
residents. A number of cities, includurg
San Francisco and Santa Monica, Califor'
nia, and Seaftlq Washington, iust to narne
a few, have begm setting prices strategt-
cally to achieve uban planning goals.
Common Mistakes
The most common mistake communi-
ties make is not charging-or at least
not charging enough-for parking.
particularly in downtown business dis-
tdcts. Often, local officials and planners,
as well as business owners, assume
that the best way to attract shoppers,
patrons to local entertainment venues,
or other visitors is to offer plentiful
fiee parking. This approach, however,
typically has signifi cant unintended
consequences, making it even more dif.
ficult for people to conveniently access
businesses or services.
The problem is that when free or
underpriced parkjng is provided, it R?i-
cally causes the most valuable spaces-
those that are located adjacent to local
businesses, services, and entertainme[t
venues-to be overused. Often, these
spaces are occupied early in the day
by employees of area businesses, even
before the visitors for whom they are
intended have come downtown.
And they tend to remain occupied
by these same parkers throughout the
day. In addition to reducing-or even
eliminating-the number of open spaces,
this practice also fuamatically increases
roadway congestion as drivers circle
blocks looking for available spaces or
waiting for occupied spaq,es tb.open
1 .\up. This unnecessary congestion makes
roadways less safe for both drivers ald
pedestrians, and needlessly generates
unhealthy emissions.
In the end, the common practice
of providing free or excessively cheap
parking doesn't accomplish the desired
end of supporting local businesses and
providing convenience for residents.
Instead, it merely ends up frustrating
drivers who are trying to get to local
businesses and those who are trying to
get home. If the problem becomes acute
enough, it can cause shoppers to look
for other options outside the city, and
icma.org/pm82
benefits. Ffst, most budget games are
eliminated, since there is no request
process and no zero-sum game where
operating managers compete with each
otJrer for a slice of the budget pie. The
CEO must use skill ald judgment in
allocating general revenues, but this
allocauon is nonnegotiable.
As a city m.rnager, I've been doing
this for more than two decades, and it
works. Department heads may think
their allocation is too small, but if they
have full freedom in how they manage
their limited resources, the trade-off is
worth it to them.
By allowing 100 percent of the sav-
ings and revenue that comes in higher
than estimated-to be carried forward,
the spend-it-or{ose-it problem disap-
pears. Knowing that they have fledbility
in how to allocate the savings, operating
managers constantly look for ways to
reduce the cost of doing business.
A major benefit ls that the govern-
ing board and CEO have now enlisted
all the operating managers in the hard
work of managing with constrained
resources. I've been amazed at the
innovative and thougtltful ways that
operating managers have met the chal-
lenge of stretching resources to provide
excellent services. I've also had to
admit they know their operations
better than I do; they can make tough
decisions, and because they own them,
they buy into them.
Another benefit is that with operating
managers responding immediately and
independently to exterlal pressures orr
revenues and expenditures, there is little
need to go tfuough an amual budget
process. Budgets can be adopted for a
24-month fiscal period.
The time freed up from number
crunching can be used, in the off-year,
for a thorough review of the govern-
ment's services and programs using best
practices in performance measurement.
And the next step in this evolution will
be to eliminate budgets altogether and
replace them with rolling forecasts,
allowing the organization to make
continuous fine-tuning adjustments to
icma.org,/pm
priorities and the allocation of resources.
(For more on this approach, check out
the work of the Beyond Budgeting Round
Table at bbrt.org.)
The primary benefit of this system
has nothing to do with finalces at all. It
simply reinforces the principles of good
management-delegation, empower-
ment, alignment of goals-that managers
follow or should follow in other aspects
of leading an organization. Better budget
decisions are a side benefit, but here are
the ones that really matter:
. Abilig of the organization to respond
quickly to abrupt changes in the
enviroflment.
. Resilience of the organization to
extemal and intemal challenges.
. Adoption of creative or innovative
solutions to problems.
. Alignment of the activities and output
of the organization with the priorities
of the goveming board.
. Job satisfaction of employees.
Going for the "Best'Managed"
Moniker
If we are entering the "decade of local
govemment," local govemments may
emerge as leaders in dealing with the
challenge of providing govemment
services, doing so more effectively than
state and national government counter-
parts. But that's a pretty low bar.
Wouldn't it be nice iI local govern-
ments emerged as the best-malaged
organizations, period? When author Jim
Collins next speaks to mana8ers at an
annual conference, wouldn't it be great if
his presentation was based on a book
highligh ting cutting-edge leadersNp in
cities ard counties? That won't happen if
we contiflue to cling to a century-old
budget maaagement system. EM
scoTT LAZEIT BY, Ph.D.,
lC|\4A-CM, is city manager, Lake
Oswego, Oregon (slazenby@ci,
oswego.or.us). He is author of the
book fhe Humen Side of Budgetng
(2013), available through Amazon and in all major
e-book fonnats.
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We offer flexibility and independence! Assignments vary and are throughout
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Candidates must have STRONG public sector experience. Requires at least
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Contact roppenheim@rgs. ca. gov for questions.
MAY 2014 I PUBLIC MANAGEMENT 1383
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